The Federal Competition and Consumer Protection Commission (FCCPC) has expressed concern over findings from its ongoing surveillance of the downstream petroleum market, suggesting the undue exploitation of consumers.
In a statement signed by Ondaje Ijagwu, Director of Corporate Affairs, the FCCPC stated that a review of the gantry prices of local refiners, marketers, depot operators and retail outlet operators revealed only token reductions in prices that are not commensurate with the steep fall in crude oil prices in the global market.
Reacting to the findings, the Executive Vice Chairman and Chief Executive Officer of the FCCPC, Mr. Tunji Bello, stated:
“To be clear, the Commission does not regulate or approve petroleum prices in a deregulated downstream market. Our responsibility under the Federal Competition and Consumer Protection Act, 2018, is to promote competitive markets, prevent anti-competitive conduct, and protect consumers from unfair, deceptive and exploitative business practices.
“We are concerned that while dealers often respond swiftly by hiking pump prices whenever crude oil prices rise, it is curious that consumers are taking far too long to benefit significantly when crude oil prices fall. Competitive markets must work fairly in both directions.”
Following a ceasefire agreement between the U.S. and Iran two weeks ago and the reopening of the Strait of Hormuz, crude oil prices have fallen to $73 per barrel, a sharp drop from the peak of $120 per barrel recorded in April.
Across the global market, crude oil prices have since returned to February levels.
The earlier spike in crude oil prices saw local refiners and marketers raise pump prices swiftly across the country, with petrol selling for between N1,350 and N1,500 per litre and diesel selling for about N2,000 per litre as hostilities intensified in the Gulf between April and May.
In February, PMS (petrol) sold for an average of between N800 and N900 per litre.
Across the country today, PMS is still sold at an average price of about N1,200 per litre, while some local refiners have fixed their gantry prices at between N1,025 and N1,075 per litre.
Though recognising that domestic prices are influenced by a range of commercial and market factors, including refining costs, foreign exchange movements, logistics, financing and distribution expenses, the Commission, however, expects competitive market dynamics to facilitate the swift transmission of resulting cost efficiencies to consumers.
Mr. Bello further stated:
“Market liberalisation does not diminish businesses’ obligations to compete fairly or consumers’ right to fair treatment. Where credible evidence indicates conduct that undermines competition, exploits consumers or otherwise contravenes the Federal Competition and Consumer Protection Act, the Commission will investigate and take appropriate enforcement action.”
He encouraged consumers to continue reporting suspected anti-competitive conduct, misleading pricing practices and other forms of unfair market behaviour through the Commission’s established complaint channels.